Vince Cable vows not to follow French example on Pfizer takeover

Kate McCann is a reporter at City A.M. She covers politics and insurance and can be contacted at kate.mccann@cityam.com.

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Vince Cable does not believe politicians should be the deciding factor in takeover bids (Source: Getty Images)

The British government will not seek to follow the French in their bid to block the GE Alstom takeover if Pfizer revives its takeover plan, business secretary Vince Cable told a select committee yesterday.

Warning that interventions like the one by the French government in the GE deal could drive away foreign investment, Cable added that UK ministers were considering new ways to enforce commitments made by foreign companies as part of their takeover deals. “The takeover panel is the existing framework for decision on whether a takeover has been conducted properly and there are legal remedies for companies that believe there has been a breach of undertakings,” Cable said.

“We are reflecting at the moment on whether that is a satisfactory structure,” the business secretary told the committee of Lords yesterday.

During the hearing, which focused on the Pfizer-Astrazeneca deal, Cable also admitted that ministers considered plans to disenfranchise shareholders following a takeover, but decided that it would be too difficult.

“If you tried to disenfranchise new buyers of shares, it’s superficially attractive but it would make it impossible for a white knight to enter the takeover situation,” Cable said, adding that he agonised about the best ownership structure but does not believe politicians should be the deciding factor in takeover bids.